• Jimenez claimed he'd made the boss a large wooden cross for Easter using city materials. But in 2008, Martinez had caught the GSA worker selling city scrap metal and keeping the profits. Jimenez wrote the city a $400 check in November 2008 and admitted in a signed affidavit that he had kept the money in his "personal bank account" for 40 days.

• Fernandez claimed to prosecutors he had done handiwork around Martinez's house in exchange for a promised promotion. He had been accused by a co-worker of stealing cast-iron fencing from the city and using it at his home. No criminal charges were ever filed.

"Any investigator could have seen that these were not credible witnesses from the outset," says Ed Martinez, a former prosecutor who represented the GSA assistant director in the case.

Johnny Louis/WENN.com/Newscom.com

Mayor Regalado's corruption sting looks like petty payback.

Perhaps that's why police didn't include the State Attorney's Office in their early investigation. In dismissing the case against Martinez, prosecutors wrote that "the lack of documentation [and] conflict in testimony" made criminal charges impossible.

Last week, City Manager Carlos Migoya reportedly offered Martinez his job back. The former GSA assistant chief hasn't decided whether to return. His lawyer contends he's considering a lawsuit against the city: "Inside the police department, they're calling this whole thing Operation Fiasco. They had no basis for pursuing a case, and they rushed to arrest these guys for political gains only."

Exposito released a statement defending his department's handling of the probe, noting that prosecutors said they had "probable cause" to arrest Martinez. "This decision will not deter the Miami Police Department from its ongoing mission to root out corruption," he said.

If that's true, the mayor could face political censure or a judgment for misusing his position.